Rupert Murdoch's News Corp. is likely to secure a deal to buy Dow Jones & Co. Inc. on Tuesday after drawing the support of a sufficient number of votes held by the company's controlling family, according to The Wall Street Journal.
The two sides are expected to reach a definitive agreement by Tuesday evening, capping Murdoch's three-month pursuit of the publisher of The Wall Street Journal, a source familiar with the matter said.
Bancroft family members holding 32 percent of the overall votes have agreed to support the $5 billion, $60-per-share bid, the Journal reported on Tuesday, citing unnamed sources.
One key holdout, a trust overseen by a Denver law firm representing 9.1 percent of Dow Jones's voting shares changed its mind and agreed to back the deal, the Journal reported. It was not clear if the firm would vote the entire 9.1 percent for the deal.
Dow Jones shares rose nearly 12 percent in anticipation of the deal.
The Bancroft family has accepted, John Prestbo, editor and executive director of Dow Jones Indexes, told reporters in Chicago. He said Dow Jones will be part of News Corp. Prestbo said the information came from an internal company memo.
A Dow Jones spokeswoman said there was no memo.
The Bancrofts own 64 percent of Dow Jones voting stock and have been deliberating over whether to accept Murdoch's $60-per-share bid, first announced in early May.
As of late Monday, Bancrofts holding about 29 percent of Dow Jones voting stock had voted in favor of the deal, according to The Wall Street Journal.
News Corp.'s board of directors is expected to discuss the deal at 4 p.m. EDT (2000 GMT) Tuesday, one source said. The Dow Jones board is expected to meet at 7 p.m. (2300 GMT), another source familiar with the discussions said.
Dow Jones is discussing a plan to have News Corp. cover the legal fees incurred by the Bancroft family, amounting to at least $30 million, the Journal reported on Monday.
After all the high-minded concerns about editorial interest and journalistic excellence, it gets down to who pays the legal fees for the Bancrofts, Benchmark & Co. analyst Ed Atorino said. And some of the trustees bailed, fearing they'd get sued by some of the younger trust beneficiaries if they voted against the deal -- so much for principles.
Some members of the Bancroft family had said they opposed Murdoch's bid because they believed he would interfere with Dow Jones's news operations, while others were seeking an even richer premium than the 65 percent premium News Corp. offered.
On Monday, a News Corp. spokesman said it was highly unlikely to proceed with the offer unless more than a reported 28 percent of the voting shares owned by the Bancroft family supported the deal.
News Corp. and a representative for the Bancroft family declined to comment. Dow Jones was not immediately reachable for comment on Bancroft support.
Dow Jones shares were up $6.33 at $57.89 in mid-day trading on the New York Stock Exchange.
Reuters competes with the Dow Jones Newswires.